Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

2 Reasons the iPhone Will Never Adopt NFC

Near-field communications is neat, but not indispensible.

You won't find many stocks that have performed better than NXP Semiconductors (NASDAQ:NXPI) over the past year. The stock is up 52% versus a still-remarkable-but-more-modest 25% for the S&P 500.

Credit Android for the gains. Samsung's hot-selling Galaxy S III includes NXP's near-field communications, or NFC, chips for powering wireless payments via Google's Wallet app. The S III has sold more than 20 million units as of this writing.

For those unfamiliar, NFC is a short-distance radio communications technology for exchanging data between two devices. For Google Wallet, this means placing an NFC chip in a phone and matching it to a reader. Retailers that embrace the concept could just as easily swipe a handset as a credit card.

Even so, there may be merit to the rumors of an NFC iPhone in our future. Apple recently acquired NFC expertise via its July purchase of AuthenTec(NASDAQ:AUTH). The company's AES2750 sensor system uses fingerprint biometrics to secure NFC-capable mobile wallets. It's fair to say the Mac maker is at least considering NFC payments in a future version of its signature handset.

And if it doesn't happen? Again, so what? NXP long ago earned its spot on our Motley Fool Rule Breakers scorecard, and all signs point to further adoption of NXP's advanced chip designs in top-of-the-line Android smartphones.

Nokia(NYSE:NOK) may also help to sharpen NXP's profit picture. The Finnish phone maker is already an NXP customer; imagine if its future Windows smartphone designs are built to handle NFC transactions as deftly as Android alternatives.

So don't get hung up waiting for NXP to ink a deal with Apple. With or without the iEmpire, there's still plenty to like about NFC technology generally and NXP specifically.

Author

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment. Find him online at timbeyers.me or send email to tbeyers@foolcontractors.com. For more insights, follow Tim on Twitter.